Company cars used to be an attractive perk that employers could offer to team members, whilst the company benefited from claiming capital allowances and tax relief on the costs associated with this.
Over the years, the tax rates on company cars have increased to as high as 37% and so the liability has often far outweighed the benefit.
However, HMRC have announced that electric cars (as well as some hybrid cars) will be tax free for the year starting 06 April 2020. This rate will increase slightly in the following two tax years, but still significantly lower than the average.
There are, of course, certain restrictions the car has to meet to fall within this bracket. There are also complications in respect of capital allowances when you come to sell the car. But if you are looking to change your car or are currently paying a high rate of tax on a company car then it may be worth considering.
For help and advice with your company cars, give the team a call on 01733 371180.